Friday, December 18, 2009

Truthfully speaking, it’s become quite an embarrassing ‘accomplishment’ for me. Almost two years ago, I had taken up the self-acclaimed mantle of being a Tiger Woods lookalike, writing in an editorial how a group of Americans had increasingly pointed out the same to me. Over time, I had rampantly propagated the same vaingloriously. My timing couldn’t have been worse! They say Tiger Woods hasn’t been able to come out of his house for the past many days. I think I won’t be able to come out of my house for many weeks altogether! Be that as it may, the question now is, would the various brands that used Tiger as an ambassador benefit from continuing with him? But even before that, revisiting a question I touched many issues back, do celebrity endorsements really help companies perform better?

While the the latest Interbrand-BusinessWeek ‘Most Valuable Global Brands 2009’ list has Coca Cola (a company renowned for choosing regional celebrity ambassadors) as the most valuable brand in the world (valued at $68.7 billion), the fact is that seven of the top ten ‘most valuable brands’ on the list do not have even a single celebrity brand ambassador as of date. These include names like IBM (worth $60.2 billion), Microsoft ($56.6 billion), Google ($31.9 billion) and Intel ($30.6 billion). Are the times of celebrity branding getting over? Not quite. In fact, not at all!

In their December 2008 paper titled ‘The Economic Value of Athlete Endorsers’, Anita Elbersei (Professor at Harvard Business School) and Jeroen Verleunii (VU University Amsterdam, Amsterdam) prove how sports athletes have a definite positive influence on their clients’ stock performance. They write, “We find that a firm’s stock market valuation increases when it recruits an athlete endorser, and (also) each time one of its athlete endorsers achieves a major career milestone.” In a hallmark 2009 Wharton marketing paper titled ‘Advertising yourself’, Prof. Eric Bradlow of Wharton states that it is important “to reach out to people who are ‘influencers’. Everyone should have a list of 20 or 30 people who will act as their ambassadors…” Professors Robert Clark (HEC Montreal) and Ignatius Hortsmann (University of Toronto) give empirical evidence in their classic research ‘Celebrity Endorsements’ that proves that not only do “celebrities enhance product recall... They also enhance consumer perception of product value... Consumers value more highly a product endorsed by a celebrity than one without a celebrity endorsement.” The acclaimed duo of Amit Joshi and Dominique Hanssens, after a decade-long analysis of Apple, Compaq, Dell, HP and IBM, prove in their thesis ‘Advertising Spending and Marketing Capitalization’ that when celebrities endorsed these ‘tech’ brands, shareholders and investors ensured the firm’s future earnings potential rose. In the brilliant treatise, ‘The Economic Worth of Celebrity Endorsers’, Professor Kamakura (University of Pittsburg) and Professor Agrawal (California State University) put forward the concept that the average impact of celebrity endorsement announcements is definitively positive on stock returns. Researchers Miciak & Stanlin give a global synopsis, “Celebrity endorsements work so well that (now, globally) about 20% of all TV commercials feature a celebrity.” It is time that those companies which do not use brand ambassadors wake up to see the true benefit. Tiger or no Tiger, celebrity endorsements work fantastically well, and avoiding the same can only lead to many opportunities lost.

With all this in the background, after many days, I finally started again socialising. I forced myself out to meet people, realizing that thankfully nobody was reminding me of my earlier follies... until this Saturday, in a party, I noticed one foreigner on the other side of the room intently staring at me for a long time. Petrified – and trying to avoid his gaze – I noticed to my chagrin that he’d started walking towards me. With disappointment, I realised my cover was blown. The man walked up to me, smiled, and spoke, “Has anyone ever told you that you look very similar to... Barack Obama?”